David Harrington from IAG channels Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it”.
From the Australian:
Australia has 700 pieces of different regulation that need to be changed before driverless cars can take to the roads, according to Insurance Australia Group, which says the advent of self-driving cars is well off into the future.
Speaking at an investor day in Sydney yesterday, David Harrington, IAG’s head of strategy said only 2 per cent of all vehicles on the road in Australia and New Zealand had “assisted” driver technology — meaning the take-up of fully automated cars would progress far slower than some believed.
“So, we’re actually quite early even in the phase of driver assistance and so while we believe in driverless vehicles, they’re still quite a long way down the track,” Mr Harrington said.
“But we think that curve is going to move very quickly and so by the time you get to 2030 we expect that 50 per cent of all vehicles in Australia will have assisted-driving technologies and by 2040 it’ll be more like 90 per cent.
“It takes on average 19 years or 20 years to turn over the fleet in Australia and that’s how long it will take people to buy new cars, replace old cars and have cars that have this technology.”
David is right in one respect. Australia is a long way behind other countries – the Infrastructure Australia paper from last year seems to recommend that we stay that way, and the Federal Government is doing nothing except considering a small cut to the luxury car tax.
I’ve written on this a few times lately, I would recommend listening to the execs from companies that are near the front (e.g. GM or Waymo) rather than anyone from an industry that will be decimated by driverless cars in a country that is waiting to see what everyone else does. My view is that driverless taxis look like they will be cost competitive with public transport (see here for some calculations) – suggesting most people will never own a driverless car.
Quick stats for the day:
- Waymo and Jaguar are launching 20,000 self-driving taxis in 2020/21.
- GM are looking to launch “mass production” of self-driving taxis in 2019, probably targeting similar numbers.
- There are another dozen or so companies not far behind.
- Total number of yellow cabs in New York: 13,587 servicing 241 million customer trips per year.
I’m not sure when driverless cars will hit in earnest, but I’m investing like they will be here much sooner than 2040.
Damien Klassen is Head of Investments at Nucleus Wealth.
The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Integrity Private Wealth Pty Ltd, AFSL 436298.